Most business partners hope that things go smoothly at their company, but there is always the chance that disputes can arise. This is especially true as the business grows and things get more complicated. These disputes could revolve around ownership percentages, payment structures, financial responsibilities, roles and duties at the company and much more.
So, how do partners resolve their differences? The first step is often to try to negotiate and see if they can find a compromise. Even if they don’t fully agree, there may be a solution that allows them to move forward and put the company first.
Is litigation necessary?
In some cases, litigation may be the only option when a court order is needed to resolve the dispute. For instance, perhaps one partner says that the other has been misappropriating company funds. That person denies any wrongdoing. But if there was significant financial harm, then one partner can actually take the other person to court.
Dissolving the partnership
It’s also important to consider when the partnership simply needs to come to an end. There are strategies that can be used to terminate it. For businesses that have multiple partners, a vote may be needed to require someone to leave. If there are just two business partners, one person may be required to buy out the other person’s ownership share. This makes them the sole owner of the company.
The exact strategy that should be used will depend on the unique circumstances. For instance, if there was any sort of wrongdoing, litigation may make more sense, whereas a buyout may be used if there’s just a difference of opinion. Either way, business professionals need to know what legal options they have.